U.S. Readying Mortgage Suit Against JPMorgan: Reports

NEW YORK ( TheStreet) -- JPMorgan Chase ( JPM) may face a lawsuit from the U.S. Justice Department over mortgage-backed securities it sold ahead of the financial crisis, according to at least three separate news reports.

JPMorgan disclosed in August it "is responding to parallel investigations being conducted by the Civil and Criminal Divisions of the United States Attorney's Office for the Eastern District of California relating to MBS offerings securitized and sold by the Firm and its subsidiaries. In May 2013, the Firm received a notice from Civil Division stating that it has preliminarily concluded that the Firm violated certain federal securities laws in connection with its subprime and Alt-A residential MBS offerings during 2005 to 2007."

Reuters ( JPM), The New York Times and The Wall Street Journal reported that a lawsuit could be filed as soon as Tuesday related to the California investigations.

JPMorgan faces several other mortgage-related inquiries. Last week, the bank paid more than $1 billion to several different regulators to resolve charges tied to the London Whale trading losses and illegal credit card practices.

JPMorgan shares were down just over 1% to 50.91 in early trading Tuesday.

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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